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Health and safety: Do higher fines and tougher enforcement make for more appeals?

The introduction of the Definitive Sentencing Guideline for Health and Safety, Corporate Manslaughter and Food Safety and Hygiene Offences in February 2016 has resulted in a huge shift in the punishment of safety offences

With hefty fines becoming the norm, organisations with a little more to lose may well be more inclined to fight cases or to appeal.

In 2011, the £1 million fine of a major retailer for asbestos exposure was considered exceptional. In 2014, fines for Network Rail and Sellafield of £500,000 and £700,000 respectively were subject to an appeal which, whilst ultimately unsuccessful, reflected the prevailing view at that time that these were large fines, even for significant corporate entities.

Under the new guidelines fines of this level, and indeed many times greater, are becoming the norm for large organisations. Comments by the judiciary suggest that fines of up to 100% of pre-tax profits could be imposed in appropriate cases, even if that results in tens or hundreds of millions of pounds and even if the result is that, in the most serious of cases, the organisation goes out of business.

The guidelines, which apply in England and Wales, came into force on 1 February 2016 and are applicable to both organisations and individuals convicted of relevant offences, although there are separate provisions for each. Fines are now directly linked to the risk of harm as a result of health and safety failings, rather than any actual harm caused as was usually the case previously, signalling a major shift in focus.

In the period from 1 February 2016 to 18 January 2017 we know of sixteen cases sentenced under the guidelines involving fines of £1m or more. Of those, eight involved fines of £2 million or more, with the largest being £5 million. That compares with total fines from all health and safety enforcement in the year 2014/15 of only £19.3m, an average of approximately £18,500 per offence.

Fines once regarded as exceptional and reserved for the most significant disasters involving multiple fatalities, such as train derailments, now look likely to become the norm for the largest organisations, with a similar escalation in fines for smaller companies. Whilst most predicted correctly that increased fines would result from the new guidelines, their commencement also fuelled concerns that they would bring with them uncertainty, increased appeals and, consequently, greater costs.  Have these concerns materialised?

To be successful, on appeal against sentence the company must show that the fine imposed was “manifestly excessive”. An appeal court will normally defer to the sentencing court’s assessment of the evidence heard before it, interfering only where necessary to avoid an injustice. With sentence under the guidelines imposed only after a detailed nine step process – intended to increase consistency and transparency – has been completed, is there really any scope for appeal when the axe falls?

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